The category that dominated growth in 2021 has innovation right on its heels as producers push the alcoholic beverage space in new directions.

Written by: Leslie Gegen

Special Thanks: Jiant Hard Tea, Smooj Hard Smoothie, Elevation Beer Co.

When you ask Andy Astor of Elevation Beer Company about the rise in hard seltzer, he’ll tell you that craft beer got big and maybe even a little bit elitist. “Seltzer creeped in while we were too focused on bashing big beer,” he says. And creep in it did, in a big way. The number of hard seltzer brands went from 10 at the start of 2018 to more than 150 in 2021, hitting $4.1 billion in sales in 2020.

When a recent Bump Williams Consulting (BWC) report released a list of the top 25 best-selling new brands in 2021, 20 were hard seltzers. And the five spots not filled by hard seltzers? Only two were traditional beer. It’s clear that consumers were thirsty for something different.

While hard seltzer sales are still strong, it’s that consumer thirst for something different that is continuing to drive new innovations among beverage producers.

“When we saw the seltzer boom happening, we wanted to get into the category but didn’t want to make something clear and bubbly. We wanted to break in in a way that was authentic to us,” said Ryan Locke, national sales director at Smooj, a hard seltzer smoothie brand that’s a subsidiary of HOMES Brewery in Ann Arbor, Michigan. “We love to create, and we knew we could really push the envelope in the category.”

For HOMES Brewery, that authenticity meant leaning into its expertise in IPAs and fruited sours to create something that’s flavor forward with 100% real ingredients. “Because of the craft beers we’ve been producing, we’ve developed great relationships with fruit suppliers,” said Locke. “We knew we’d have incredible opportunities to utilize really cool, fun fruits to create what would later be known as Smooj.”

So, they went to work. The brewers spent significant time early on in development, putting recipes, formulas, and processes together to ensure they could deliver a consistent product. Thanks to the “magic going on in the enchanted mood factory,” according to Locke, they were even able to deliver a gluten and dairy free product that still hit that creamy note consumers expect in a smoothie product.

When HOMES Brewery released the first batch of Smooj to its loyal fanbase, it was blown away by the response. The first release sold out in two hours. The second in five minutes. The third crashed their servers. That’s when they knew they were onto something big.

Smooj’s loyal fanbase includes those of all ages – from younger folks (of drinking age, of course) to retirees and everyone in-between. “We don’t get negative feedback once people have an opportunity to try it. My 72-year-old father-in-law is a die-hard IPA drinker and now he’s drinking a four pack of Piña Colada Smooj every weekend,” said Locke.

Locke’s father-in-law isn’t the only Piña Colada fan – the flavor is Smooj’s number one seller. But the hard smoothie brand isn’t relying on its fan favorite. In addition to regular twists on Piña Colada, such as a prickly pear variety, it’s also blending up new flavors in the “Smooj Lab” at least bi-weekly and utilizing the HOMES Brewery taproom as a test kitchen of sorts. This summer they’ll be releasing cherry cola, strawberry waffle cone and blueberry cobbler, as well as tropical cocktail styles that incorporate fruits like passionfruit and guava, to its loyal local fans. If we’re lucky, the flavors will make it beyond Ann Arbor to all of Michigan. Then, if it’s a hit in the mitt, Smooj will look toward a national release.

Smooj isn’t the only brewery utilizing its taproom to test the alternative beverage market. You’ll find Elevation Beer Company out of Poncha Springs, Colorado, testing flavors of its recently launched Summerville Steeped Seltzer to get a feel for what’s working and what’s not before pushing to distribution.

“We recently tweaked the recipe based on feedback from the taproom guests and staff,” said Andy Astor, brand manager for Elevation Beer Company, including Summerville Steeped Seltzer. “We were toying around with how to sweeten the product, the amount of tea and fruit puree to utilize, as well as how long to steep the tea. We launched version 2.0 in March and the team is stoked on it.”

One thing that hasn’t changed? Using real tea, real fruit puree and pure Poncha Spring water in the creation of Summerville.

Although “beer” is the operative word in Elevation Beer Company for Astor, with everyone jumping into the flavored malt beverage space the team knew they wanted to create something related, but separate. “We wanted to do something that was more akin to our brand,” said Astor. “We knew that if we were going to do this, we wanted to do it with our own slant, which meant using easily identifiable ingredients provided by nature, as we do with all of our products.”

For that slant they enlisted the help of Maria Uspenski, owner of Boulder-based Tea Spot and frequenter of the Elevation Beer Company taproom. Uspenski has a home in nearby Salida, Colorado, and forged a relationship with Elevation Beer Company team over a shared love for craft beverage production.

Utilizing Tea Spot tea, Summerville crafted two anchor flavors – hibiscus and lime, and black tea and lemon – but with the new recipe dialed, the team is looking forward to developing new flavor combinations in the future. And to get those flavors, they’re not taking any shortcuts. After the brewers create the seltzer, they steep the tea into the base utilizing a cheese cloth. This may sound straightforward; but, as it turns out, it isn’t the industry standard.

“In tea production and related beverages, the market dominant method for flavoring is essentially a ground up, super concentrated tea.” Said Aaron Telch, co-founder of Jiant. “One way that Jiant really shines is by using loose leaf, organic tea. It’s not necessarily the most cost effective, but it pays off. We don’t want to cut corners. We’ve found that there is no substitute for quality.”

Jiant was born out of the co-founders,’ Larry Haertel Jr. and Aaron Telch, frustrations that there wasn’t a gluten-free, better-for-you alcoholic beverage that was actually enjoyable to drink. So, they decided to make their own. Telch was a fan of kombucha at the time and knew there was residual alcohol content in the beverage. He wondered, could he increase the ABV to create a better-for-you alcohol? With that idea, Jiant was off and running. It launched into the alternative alcoholic beverage scene in 2019 with hard kombucha.

Kombucha is a fermented tea drink made by placing a mixture of bacteria and yeast into sweetened black or green tea. It’s those origins in fermented tea that made the progression into hard tea last summer a natural fit for Jiant. The team knew they had tried-and-true expertise in working with tea and botanicals and they wanted a product that moved a little closer to seltzer with a lighter body.

“Hard tea has been a really fun project for us,” said Haertel Jr. “It allows us to tap into our specialty of using tea and botanicals in a really complex way, delivering on that tea flavor that people are looking for with much better ingredients and less sugar.” Jiant is selling the teas in a variety pack of three flavors: Mango Lime with oolong tea; Raspberry Mint with keemun black tea; and Blood Orange Grapefruit with pu’erh tea.

When asked what’s next for the brand, Haertel Jr. said “we just launched our first ever cocktail inspired kombucha Mai Tai with eight percent ABV. We utilized tea and botanicals to create the Mai Tai flavor that people know and love with clean ingredients and without all the sugar. We’ll probably continue to look at high ABV options to create that cocktail experience and bring more consumers to hard kombucha and hard tea.”

If the last few years make anything clear, it’s that alcoholic beverage brands need to continue to innovate to maintain consumer attention. “Drafting off of the hard seltzer boom gave producers and suppliers leeway to push innovation,” said Locke. “Beer drinks are willing to go out of their comfort zone to try unique and different.”

It’s a sentiment Telch echoes, “There are big alcohol categories that we think we can take share from, primarily hard seltzer and beer. There are different reasons consumers come into [the alternative beverage space], but it’s a good landing place for those who are going between categories. Consumers are increasingly doing this, and they’re also the ones who spend more on alcohol.”